NHB to raise $600 million from World Bank, DFID and Japan Bank to promote low-cost housing

KOLKATA: National Housing Bank or NHB plans to raise $500-600 million loans from multilateral funding agencies at a cheaper rate for financing low-cost housing units.

The housing finance regulator is in talks with the World Bank, Department for International Development or DFID of the UK and Japan Bank of International Cooperation for raising the fund, chairman and managing director RV Verma told ET Wednesday.

It is looking to raise $300 million from World Bank and $200 million from DFID. It may draw another 36 million euro from Germany's KfW from a existing 50 million euro line of credit.

""The World Bank and DFID loans will be used for promoting low-cost housing," Verma said. The KfW fund is for promoting energy efficient housing units. Talks with JBIC has just started. Verma expects the World Bank and DFID to sanction the loans this year while the utilisation of the funds can be phased over one or two years.

""Talks are in advanced stage with World Bank,"" the CMD said. The funding body will offer the fund at 0.25% over Libor, the London Inter-bank offer rate while the total cost of borrowing after hedging will come around 6% a year.

This fund raising is part of NHB's proposed annual borrowing of Rs 14,000 crore. It plans to raise a total of Rs 5,000 crore each in tax-savings bonds and normal market bonds. It will issue rural bonds for the balance Rs 4,000 crore.